Chapter 1

Background of Today’s Advertising

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ADVERTISING

What is advertising?

Where do we find Advertising?

Can we ever get away from advertising?

Is advertising to controlling in our lives?

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A DEFINITION OF ADVERTISING

It is a paid for by the sponsor rather than run at the discretion of the medium

It is nonpersonal.

It identifies the sponsor of the message.

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A DEFINITION OF ADVERTISING

It is persuasive.

It is carried by mass media.

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A DEFINITION OF ADVERTISING

Advertising: a planned communication activity in which messages in mass media are used to persuade audiences to adopt goods, services, or ideas. Advertising is distinguished from other promotional activities in that it is paid for by an identified sponsor, nonpersonal, carried by mass media, and designed to be persuasive.

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Advertising is:

A communication toolTwo requirements:

Centralized exchange Economy where supply surpasses demand

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Factors Creating a FoundationBeginning of the fulfillment of a

democratic idealIndustrial Revolution

Mass productionNeed for skilled workers

Introduction of the railroadNational branding

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In the Beginning

Advertising has a 5000-year recorded history

The last 100 years in US history have been most influential

Contributors from the beginning:BabyloniansGreeksRoman merchants

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Four Broad Periods of Study

Pre-marketing EraMass Communication EraResearch EraInteractive Era

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Move to Creativity

Increased output created a competitive environment

Emphasis on creative advertisingAdvertising seen as a “science”Idea of planned obsolescence

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Print Media

SiquisNewspapers – historically been the

primary advertising mediumImportant people

Johann GutenbergBenjamin HarrisBenjamin Day

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Print Media (continued)

Magazines – slow but steady growth

Saturday Evening PostLadies’ Home JournalTime

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By 1920, high color advertising was commonplace.

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The Advertising Agency

ForerunnersVolney PalmerGeorge RowellJ. Walter ThompsonN.W. Ayer and Sons

American Association of Advertising Agencies

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Legislation

Pure Food and Drug Act (1906)Federal Trade Commission Act (1914)Federal Food, Drug and Cosmetic Act

(1938)Wheeler Lea Act (1938)

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Advertising and WWI

Marked the first time advertising was used as a social instrumentAgencies tried to

Arouse patriotismSell government bondsEncourage conservatismPromote war-related activities

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Patriotism was a common advertising theme during WWI.

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1920’s

Mini-depression to crashProducts appearing on the market

Passenger carsElectric refrigeratorsWashing machinesElectric shaversRadios

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Cadillac

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Coca-Cola

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Introduction of Radio

Invented by Guglielmo MarconiUsed mainly by maritime operators

in the beginningKDKA – first commercial station

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Modern Era of Radio

Presidential ElectionsSporting eventsLocal entertainmentNBC CBS

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The Great Depression of the 1930’s

Rapid growth was slowed by Depression

Causes of the DepressionExcess industrial capacityHeavy consumer debtDeclining price levels

Consumer spending was discouragedWWII turned this trend aroundWhat is happening today? 2015 (fuel)

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Advertising During WWII

Similar to WWIMost advertising was created to

encourage Americans to cooperate in the war effort

War Advertising Council

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Exhibit 1.8Advertising messages were sponsored by the government.

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Exhibit 1.9War Council reminds Americans not to disclose war secrets.

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Growth Period from 1950-1973

Trend Percentage of growth

Population of U.S. 38%

Disposable income 327%

New housing starts 47%

Energy consumption 121%

College enrollments 136%

Car registrations 151%

Telephones in use 221%

Retail sales 250%

Frozen food production 655%

Airline passenger 963%

Homes with dishwashers 1043%

Homes with air conditioning 3662%

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Advertising in the Fragmented 80’s

Major developmentsNew technologyAudience fragmentationConsolidationCredit

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Service Economy and the 21st CenturyService providers are the trendWal-MartU.S. Bureau of Labor Statistics --

2010, service employment will outpace manufacturing by a 5-1 marginWhat is the problem with this?

Trust factor challenged in first decade of 21st century

Permission Marketing

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Summary

History of advertising can only be studied within the context of the social and economic development of a country.

Fundamental changesDevelopment of e-commerceReaching consumers on a more personal basisAudiences are taking greater control of

communication channels.Field is fast and ever-changing.